Curtis KroekerPartner Contributor and Group General Manager for BizBuySell.com and BizQuest

There are endless options of small businesses available in today’s business-for-sale marketplace; however, not every business is a fit for every buyer.

When starting the search for a business to buy, think through what you really want in a business. It’s these factors alone that must drive your selection process and define what businesses you evaluate. At the end of the day, whether you find the right business for you or not will play a major role in your success as a new business owner.

Here are five tips to help guide you in the search process:

Determine your interests

Owning a business is a major time commitment, so in choosing an industry, make sure to choose one that interests you and fits your lifestyle. If you’re unsure of what type of business you want to buy, talk with owners across industries to see how their opinions stack up with your needs and wants.

Often when starting a business from scratch, entrepreneurs will build one around a personal hobby or interest. While as a buyer you don’t have that same luxury, it doesn’t mean you can’t choose to own a business in an industry you’re passionate about. In fact, it’s recommended, as you’ll be immersing yourself within that industry for years to come, and one known key driver of success is actually enjoying what you do.

Skills, talents and experience

While doing something you're passionate about is great, it alone won’t guarantee success. You need to take the time to really think about and evaluate your skills and past experiences. Although it’s not impossible to succeed without previous experience, you should first think about working in an industry where you have some knowledge and work history before diving into an ownership position in one you know little about.

What’s your financial position?

Before purchasing a business, you must also consider the capital resources you have available, since some industries require a higher level of initial investment than others. For example, manufacturing companies typically require a much larger capital investment at the start than small consulting firms or businesses with fewer assets.

Because of this, it's critical to ensure you have enough available capital to buy a small business in your desired industry. While there’s seller financing, thoroughly evaluating you financial position can help you better decide which business opportunities fit within your means.

Conduct market research

Before choosing an industry, thoroughly evaluating short- and long-term industry forecasts is a must. You want to determine if there is an opportunity for growth or if the industry is in decline. Being a smart buyer, it’s important to select an industry that has the potential to increase the value of your investment.

You also want to research the market in your local area to determine if there’s room for another business to grow and compete or if the market’s already saturated. If you’re unsure of how to properly determine this, seek out a local business broker to help evaluate the condition of the local marketplace as well as local trends that could impact the success of your business.

Use your business network

New buyers often don’t realize the importance of their existing networks when searching for a business. While it shouldn’t stop you from pursuing desirable opportunities, buying a business in an industry outside your existing network will result in a lot more work, as you’ll have to form new relationships from scratch — something that takes time and could delay the business’ immediate growth. On the other hand, when working within your network, your current contacts are assets that can lead to loyal customers and strategic partnerships.

Finding the right small business is no small feat; however, the rewards of owning a business you’re passionate about far outweigh the initial time and cost commitments. So next time you’re searching for a new business venture, let your personal interests and needs guide the search process.